Insights 
VT 
The Japanese Yen (JPY) has gained ground against the US Dollar (USD) for the third day in a row. This rise is supported by recent events including the Bank of Japan’s (BoJ) dovish stance and worldwide economic uncertainties. Analysts anticipate that the BoJ could increase interest rates again in 2025, amidst concerns about US President Donald Trump’s trade strategies and elevated geopolitical risks.
The BoJ has lowered its growth and inflation forecasts, delaying expectations of a rate hike. Despite this, the JPY benefits from its reputation as a safe-haven currency amid global tensions. These include recent drone strikes on Moscow by Ukraine and a conflict involving Israel and the Houthi movement.
Resilient Us Economy
Trump has suggested potential trade agreements and possible tariff reductions on China, while the US Institute for Supply Management (ISM) reported growth in the US services sector. This reflects a resilient US labour market, which supports the USD ahead of a significant Federal Reserve meeting.
Technically, the USD/JPY pair shows potential for further decline. Traders react cautiously, suggesting any recovery might attract selling interest, especially if the price approaches the 144.25-144.30 zone. A break below current levels could push the pair towards lower support areas.
The Japanese Yen’s recent three-day upswing against the Dollar didn’t occur in isolation, and much of its energy seems to come from a complex mix of policy signals out of Tokyo and broader geopolitical instability. With the Bank of Japan toning down its inflation and growth projections, markets are now looking further out—perhaps towards 2025—for the next step higher in Japanese interest rates. This shift in expectations has helped to steady the Yen, even as it keeps rates below most global peers.
We’ve also seen renewed market interest in the Yen as headlines grow more tense. The drone attacks around Moscow and the increasing unrest linked to the Houthi group have served as reminders that risk remains very much alive, supporting currencies historically seen as more stable when global conditions deteriorate. That bias won’t disappear overnight, especially as fresh developments are likely in the coming weeks.
Shifting Global Dynamics
Despite adjustments in Tokyo, the Dollar found underlying strength from continued growth in US services and strong hiring trends. Nonetheless, price action suggests that caution is quietly building ahead of what’s likely to be a much-watched statement from US policymakers. The current rangebound behaviour could break meaningfully if interest rate guidance shifts or if there’s an unexpected change in tone.
Trump’s recent remarks on relaxing tariffs toward China stirred short-term optimism, but markets seem unsure how deeply those intentions will go, or how quickly they might be enacted. That type of unpredictability naturally feeds into defensive posturing in the short term. While some might read his stance as supportive for global trade, uncertainty remains, and currency positioning has become correspondingly more tentative.
Technically speaking, the Dollar appears vulnerable at the moment. We’ve been observing increased sensitivity to movements near the 144.25–144.30 band. Traders continue to treat rallies towards these levels with suspicion, and sell-side strategies remain favoured unless new data clearly shifts momentum. We expect stop placements below current support to trigger if breached, which would open up further downside risk, pulling the pair towards lower technical shelves previously tested earlier in the year.
In the absence of new rate guidance from the BoJ and with the US Fed nearing its next announcement, near-term trading is likely to remain headline-driven, shaped by any shifts in safe-haven appetite or sudden changes in rate assumptions. Until then, tactical plays look more favourable than directional conviction. Moves into higher resistance areas should continue to attract hesitant sellers, particularly as longer-term structure still leans towards consolidation rather than breakout.
